China’s Recyclables Ban: A Crisis and an Opportunity

This January marked the official start date of China’s ban on yang laji: foreign garbage. Last July, China informed the World Trade Organization that it would no longer accept imports of 24 types of recycled materials, including scrap paper and the low-grade plastic used in grocery bags and soda bottles. China’s decision has profound environmental and economic implications, and countries around the world are struggling to come up with both long-term solutions and short-term answers for what to do with their countries’ rapidly growing mountains of trash.

China has long been the world’s biggest importer of recyclables, which it used as cheap raw materials to feed its hungry economy. The United States has been happy to take advantage of that system, with shipments of recyclables to China accounting for 10 percent of all exports in 2016. Given the American trade deficit with China, it made financial sense to load container ships with US waste rather than letting them return to China empty. However, China now claims that this practice is harmful to its environment, with many exporters sending poorly-cleaned, unseparated, and contaminated materials. The recyclables ban is just one way China is striving to make its economy more environmentally friendly. The government is also shutting down high-polluting factories in an attempt to address its pollution-related public health crisis. However, most observers also see the recyclables ban as part of an attempt to retool the Chinese economy away from low-value exports which relied on cheap recycled materials.

The Chinese government has been somewhat opaque in releasing the exact requirements of the ban or even the timeline in which it will take effect, but the mere threat was enough to cause US wastepaper exports to decline 14.3 percent in 2017, while plastics fell 7.1 percent, according to JOC. The recyclables ban could also be used as a weapon in the escalating trade war between China and the US, which heated up this week when President Trump announced steep tariffs on imported solar cells, a move that angered China.

Putting aside the reasons for the ban, the situation demands an immediate response. In Europe, North America, and elsewhere, huge piles of recyclable materials are accumulating. The New York Times reports that in Halifax, officials “had to get special permission to bury about 300 metric tons of the material in a landfill” while in Calgary, “the material has been stockpiled in empty storage sheds, shipping containers, trailers and warehouses since last fall.” The owner of an Oregon recycling company who was accustomed to shipping most of his inventory to China says he is trying to export to other Asian countries, but they lack the infrastructure to absorb the volume that China is turning away. While business in countries like Vietnam and Malaysia might eventually grow to meet with demand, experts warn that even this might be only a temporary solution if those nations find the environmental cost so high that they implement bans of their own.

For some, the recyclables ban is an opportunity. An op-ed in Forbes describes it as an “incentive to innovate” and improve the US’s own recycling capabilities to be more efficient, cost-effective, and environmentally friendly. In Europe, both the UK and the EU have treated the ban as an overdue prompt to decrease waste. In January, EU regulators set forth a new policy goal to make all plastic packaging in the EU market recyclable or reusable by 2030. Concerns about the buildup of plastic in the oceans have led various nations to ban plastic grocery bags, drinking straws, and other single-use plastics. On the opposite end of the spectrum, US plastic manufacturers see China’s ban on recycled plastics as a golden opportunity for virgin plastics. According to Forbes, “US exports of polyethylene plastic to Asia will reach about 5 million tons by 2020, a five-fold increase from last year, with most of it headed to the Chinese market.” The boom in new plastic manufacturing, coupled with the glut of cheap natural gas, will likely bring plastic prices down, to the benefit of US manufacturers.

Many shippers won’t feel the impact of the Chinese recyclable ban for some time, since the problem of waste tends to be passed first to retailers, then consumers, and then municipalities. Yet with landfills (and oceans) filling up, it would be wise not to wait for legislation that forces industry to curb its plastic use. Those who can should investigate greener and slimmer packaging methods, and take an active interest in what waste disposal systems work best for their particular area.